The main news this morning is that SmartStream has delayed its IPO as they struggle to gather sufficient demand even after cutting the price by over a third. It looks like Citi is looking for a few more days to fill the book.
Our View
First of all we need to correct a misquote in the FT article this morning - we said that fidessa was the nearest comparator to Smartstream, not competitor as got printed. fidessa is clearly not a competitor of SmartStream but it does operate in broadly the same market space. That said, we do believe that with a price at around £175m, which is where we think it is being pitched, SmartStream is looking pretty good value. Given the figures that we believe are in the market for the year to June 2008, this would put SmartStream on a current year EV/EBITDA of under 10x which would seem to leave room for a re-rating as the company gains momentum as a listed company.
